In Drosophila, the fish-hook (fish) gene encodes a Sox protein essential for embryonic segmentation and nervous system organization. In this study we examined potential functional roles of fish in postembryonic developmental processes, including those involved in adult appendage development. We show here that Fish protein is expressed in discrete patterns in the larval eye-antennal and leg imaginal discs, the central nervous system, the hindgut, and salivary glands. Genetic mosaic studies indicated that fish function is required for the growth or survival of imaginal cells, and the expression of engrailed and wingless. Ectopic expression of Fish protein resulted in severe disruption of adult structures; legs and antennae were truncated and eye formation was suppressed. These morphological defects were correlated with altered expression patterns of the wingless, decapentaplegic, and bric-a-brac genes. Finally, analysis of truncated versions of Fish protein indicated that the HMG domain was sufficient for Fish nuclear localization and that removal of the transcriptional activation domain did not eliminate Fish function. While Sox proteins have been shown to be important for eye and limb formation in vertebrates, these data provide the first evidence for Sox protein functions in appendage development in invertebrates.